Danny Salas

Archive for September 14th, 2009

Chico, CA Interest Rates Market Report – Economic Influences – September 14, 2009

We've Moved Below the 200-Day Moving Average...Be Cautious

Who’s Bickering?

“We shouldn’t be arguing and bickering about who killed who!”  A famous line from Monte Python.  The “killed” reference is regarding interest rates!  And who’s arguing and bickering?  China!

Obama’s Move

President Barrack Obama, in an effort to keep American Jobs, put a new tax on Chinese Tires.  Many Americans are purchasing cheaper Chinese Tires to help with their costs, and it’s putting many American Workers out of a job.  So, China is upset with this new tax, and they’ve filed a grievance with The World Trade Organization and threatening to quit purchasing and perhaps sell off their existing Bonds.  Specifically Mortgage-Backed Securities (MBS), or Mortgage Bonds. 

Higher Rates?

If China starts to move toward a Trade War with the United States and not purchase our MBS, coupled with the fact of selling their existing MBS holdings;  Interest Rates, could be vulnerable.

Locking?

Again, a short term escrow may want to lock.  Particularly regarding disclosure periods due to new MDIA rules.  If you can stomach it, you may want to wait, the rest of the week, to see how everything plays out.